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25 Oct 2016 (AFR) – Liquidity question haunts ETFs (as review looms)

(25 October 2016, AFR, p25, The Lex Column)

‘Exchange traded funds are far from being the elephant in the room. Rather than ignoring these ever more popular securities, the Securities and Exchange Commission is reportedly preparing to launch an in-depth review of them. Given their growing importance, this is welcome. A big worry is that liquidity in ETFs is deceptive, especially when a fund tracks less liquid assets, such as bonds or emerging markets stocks. So-called authorised participants (often investment banks) try to match buyers of ETFs with sellers in the secondary market.’

Read more at (might need AFR login access, or try:

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